Governments around the globe are closely monitoring cryptocurrency firms. In the United Kingdom, the FCA is stepping up its efforts. The most recent Bitcoin price decline sparks a lot of additional concerns regarding such service providers. Additionally, a lot of companies seemingly maintain shady business models.
UK’s FCA Continues Crypto Crackdown
Investigating cryptocurrency companies makes sense to government agencies. There are many unknown factors regarding these business models. Furthermore, the lack of active regulation allows for shady business models to thrive. in the United Kingdom, no progress has been made to regulate the cryptocurrency industry. That forces the hand of the FCA to effectively take action.
A rising number of inquiries into such businesses has become apparent. Local sources claimed over twice as many investigations are currently ongoing. It is believed over four dozen firms are currently under scrutiny. Compared to May 2018, just 24 firms were under official investigation. Back then, the cases pertained to companies operating without legal permission. It is unclear if the current inquiries pertain to the same aspect.
Surprisingly, the FCA has received half a dozen whistleblowing reports. These reports are submitted to the agency by employees of existing cryptocurrency firms active in the United Kingdom. A very peculiar trend, considering no such reports have been filed in the three years prior. Something appears to be brewing in the UK cryptocurrency sphere, albeit it may not necessarily be a positive trend.
Financial Losses Make People Nervous
This growing number of crypto-related investigations in the United Kingdom isn’t necessarily unique to that region. In the US, the SEC has also begun to investigate more companies lately. Similar efforts are noted across individual US states, who issue cease and desist letters to companies on a regular basis. This is a positive development, as investigations bring more legitimacy to the industry.
Additionally, another reason for this increased scrutiny is not hard to find. Bitcoin’s price surge last year and in early 2018 still raises a lot of questions. The subsequent price decline – which is still ongoing – only makes this industry even more suspicious. It is only normal authorities want to ensure nothing nefarious is going on. Many people invested hard-earned money into cryptocurrency and now deal with substantial losses.
This price decline is also a positive trend, in an odd way. Industry expert Andrew Jacobs considers this a development which will expose any fraudulent activity. As the FCA steps up its efforts, it will become more difficult to get away with any illicit activity. That will help improve the cryptocurrency industry in the United Kingdom. For now, the outcome of any ongoing inquiries remains unclear.
What do you think about the increased scrutiny towards the cryptocurrency industry? Let us know in the comments below.
Images courtesy of ShutterStock and